MANILA - McDonald's Philippines may implement a "slight" increase in prices this year, as a weak peso bloats the cost of raw materials, its president and CEO, Kenneth Yang, said Tuesday.
Yang said prices could rise by one to two percent, well below the inflation rate, which quickened to 3.4 percent in March.
McDonald's imports its french fries and wheat among others. The company's poultry supplier also buys animal feed from abroad.
"We're very conservative when it comes to that. Our commitment to customers is an affordable menu. To keep our prices low is something we tried as much as possible," Yang told ANC.
"The weakening of the peso impacts us with our food cost also. We may have a slight pass on cost, but not necessarily the full load," he said.
Yang said the company might absorb a portion of the price adjustment by cutting costs in other areas. He said a possible price increase was unlikely to hurt sales.
"The consumer confidence is very strong and our offerings are exciting this year. I'm quite confident that we should continue to do well," he said.
With "vibrant" consumer spending, Yang said McDonald's would meet its growth target this year, despite the lack of election spending that boosted sales in 2016.
McDonalds plans to grow the share of Visayas and Mindanao in its store network to 30 percent from 20 percent, Yang said. Luzon, including Metro Manila, has 80 percent of McDonald's stores.
"More than before, more of our growth and store openings will be in Visayas and Mindanao moving forward," he said.